Storm from the East

About 8,300 – this was the number of people representing 69 different countries participating in this year’s fair. They had come to the French Riviera to meet their counterparts and colleagues for the three days of the event (November 13th to 15th). Some of them they were meeting for the first time, and with others they were tightening their cooperation. Was it a success? I had hardly just arrived in Cannes when I heard the opinion of some of the regular attendees that there seemed to be fewer tenants this year. On the yacht of Polish shopping centre developer Gemini Holding I heard that there were fewer partners this time for negotiations, but the meetings they were having were more concrete. The fact is that the Polish Council of Shopping Centers, which unites the Polish retail sector (the developers and tenants of malls as well as companies connected with the industry), did not even have a stand this year. Despite being somewhat few and far between, the Poles who were at Cannes nevertheless made themselves seen. Marta Augustyn, the associate director of the retail agency at Jones Lang LaSalle, believes that this year’s Mapic was a confirmation of the central position occupied by Poland in the CEE expansion plans of retail chains. “Large international companies that have been monitoring our market are now moving slowly towards serious negotiations or finalising franchise agreements. Players who are well-established on the market are considering increasing the sales area of their shops. This indicates that the market is being positively viewed by existing tenants as well as the brands that have yet to launch themselves here,” argued Marta Augustyn. However, there was no shortage of some rather more sceptical evaluations. “From my perspective this year’s Mapic fair did not generate any breakthroughs. The ‘beauty contest’ among developers who are building shopping malls or trying to recommercialise existing ones was more competitive, but these are mainly projects that were showcased last year. The lower footfall in shopping centres has resulted in a market anxious to see any signs of a revival in terms of the economic situation. This has led to a situation where we have a tenants’ market and lessors falling over each other to attract the most recognised players and brands to kick start the wider commercialisation process of their malls. This is why it is easier these days to obtain finance for the fit-out work than to negotiate a decent rent rate, which is often only a turnover-based one, and in this way split the investment risk between the developer and the tenant. I am very happy, though, that Polish fairs have been gaining in importance and as far as our retail market is concerned I can virtually see no significant or substantive difference between them and an event like this,” claimed Przemysław Zacny, the real estate director of AmRest.
It was 2009 when I last attended Mapic, so it was easier for me to compare this meeting to the much larger MIPIM fair in March. And how do they measure up? This year’s Mapic resembled MIPIM in 2008 when I could hear the Russian language on every boulevard, in the shops and restaurants, as well as in the festival palace itself. “It is not our first time at Mapic, but this is the first stand we’ve had. We decided to make our presence stronger because we have a lot of things to present. We are currently carrying out six projects in Russia and Ukraine with a combined leasable area of 450,000 sqm,” revealed Alexey Chinaliev, the vice-president of Moscow-based development company TPS Real Estate. Another Russian company, jewellery manufacturer Adamas, which is making the medals for next year’s Winter Olympics in Sochi, was the sponsor of the opening night party in the Majestic Barrière hotel. Seeing how much our Eastern neighbours seemed to feel at home in Provence made me wonder whether the Russian market was not nearing the stage of overheating. We will find out the answer to this, as well as the question of who the host of next year’s event will be, in the second half of November 2014 (the fair will take place between the 19th and the 21st of that month).